- XAG / USD stable around $ 23.50 after Fed cut announcement.
- The US central bank has left the door open to a faster pace of QE reduction.
- XAG / USD: From a technical point of view and confirmed by a bullish flag, tilted upward.
Silver (XAG / USD) edged up after news of Fed bond cuts, up 0.13%, trading at $ 23.54 in the New York session at the time of writing. On Wednesday, the Federal Reserve revealed it would cut its bond buying program in mid-November. In addition, leave the door open which would adjust the pace of its QE reduction program according to the needs of the central bank.
It appears investors viewed the announcement of the US central bank’s bond cut as accommodating, as evidenced by US stocks posting new all-time highs around the New York close.
Remarks by Fed Chairman Jerome Powell after the Fed press conference
On Wednesday, after revealing the pace of the Fed’s QE cut to start later in November, Fed Chairman Jerome Powell held his press conference. There, he said the central bank could be patient with the rate hike. In addition, he added that if there was a need to fight rising prices, he said “we will not hesitate” after announcing the $ 15 billion reduction in his bond buying program. .
President Powell reiterated that the tapering “does not imply any signal regarding the Fed’s interest rate policy.” Additionally, he noted that the pace would put them on track to complete the pandemic stimulus package in mid-2022, but left the door open for adjustments.
Jerome Powell insisted that “we don’t think this is the right time to raise interest rates because we want to see the labor market recover more.”
Regarding inflation, the Fed chairman said it “is high” but it is attributed to supply and demand imbalances linked to the COVID-19 pandemic.
XAG / USD Price Prediction: Technical Outlook
The white metal is approaching the highs of a bullish flag on the 4 hour chart. Additionally, the precious metal rebounded off the 200 simple moving average (SMA) around $ 23.09 and rose $ 0.50 as the Fed announced the bond cut. Nonetheless, to resume its uptrend it would need to recover the 100-SMA to $ 23.73.
In the result of the above, the next resistance zone would be the confluence of the psychological level of $ 24.00 and the 50-SMA. A break from this level could send silver to 2021 highs around $ 24.85.
On the flip side, a failure at $ 23.73 would keep the US bulls in control, exposing the $ 23.00 figure as the first level of support before re-testing the $ 22.00 figure.